As part of her recently released Annual Report to Congress, Nina Olson, the National Taxpayer Advocate, identified IRS employee training as one of the most serious problems facing taxpayers. If the IRS does not properly train its employees, taxpayers will feel the negative consequences of that failure. She has monitored IRS training since 2013 after hearing concerns from taxpayers and practitioners about receiving incorrect answers from the IRS and complaints about IRS employees being unable to go beyond the scope of a tax topic script. Recently, the Taxpayer Advocate Service (TAS) conducted an additional review to find out if the training process continues to be an issue or if IRS has improved its training program.
TAS found that while the IRS has increased the training budget since a low point of nearly $23 million in fiscal year (FY) 2013, cuts to spending on training far outpace cuts to the overall IRS budget. In non-inflation adjusted dollars, the IRS budget has been cut by just under $300 million dollars, or about 2.5 percent, since FY 2009, while the training budget has declined by nearly 75 percent. In FY 2017 the IRS spent only $489 per employee on training, or almost $1,000 less when compared to $1,450 per employee spent in FY 2009.
IRS did not devote any discernable resources to the Wage and Investment (W&I) division training. W&I is the largest IRS operating division, with nearly 35,000 employees, or 43 percent of the IRS workforce. Nonetheless, IRS spent only $87 per employee on training in FY 2017. Even more concerning is that the IRS spent $1 million less on training W&I employees in FY 2017 than it did at the low point of overall training spending in FY 2013. Such an approach to training also negatively impacts employee morale because it fails to provide employees with the tools they need to do their jobs.
Tax examining technicians in the Tax Exempt and Government Entities (TE/GE) division received only 19 hours of training per employee in FY 17. The IRS-wide position description for the Tax Examining Technician details that these employees must possess extensive knowledge of individual and business tax law, forms, regulations, collection techniques, notices, and many other IRS documents. After backing out the required mandatory briefings all employees must take, the TE/GE employees received just 14 hours of substantive training per employee in FY 17. That’s not even two full work days of training all year. It seems far-fetched that employees could receive training on updates to the tax law, refresher courses, and training on processes and procedures in only 14 hours a year.
Concern about the decrease in face-to-face training in key job series was also a concern. In FY 2013, the IRS cut almost all in-person training. However, hours of in-person training decreased further in FY 2017 in some of the key job series identified. Small Business/Self Employed (SB/SE) Revenue agents received 36 hours of in-person training in FY 2013, while in FY 2017 they received only 21 hours of in-person training. Similarly, TE/GE Revenue Agents received nearly 27 hours of in-person training in FY 2013 while they received less than seven hours of in-person training in FY 2017.
The failure by IRS to adequately train employees impacts all IRS functions. If the agents and telephone assistors are not familiar with the law, the adjustments they make may negatively impact taxpayers. The answers given by IRS could lead a taxpayer to file an incorrect return which may result in a penalty to the taxpayer who was just doing as advised.
Now we are all faced with the Tax Cuts and Jobs Act, a massive change that will impact every taxpayer in the United States and some internationally. When taxpayers receive an incorrect answer, it erodes trust in the IRS and leads to rework for the IRS or additional cases coming to TAS to get the right answer for the taxpayer. Considering the recent tax code legislation, employees will need training on the changes to the tax code quickly to be prepared for the inquiries that are sure to come from taxpayers and practitioners as they attempt to figure out how the changes impact their tax situations. Given the dollars the IRS is currently spending on training and the hours devoted to training per employee, it is hard to imagine how the IRS will effectively deliver training on the new legislation.
How Long Will it Really Take to Learn TCJA?
Finally, Kristine and I have stopped counting the hours we have spent just understanding the key aspects of this tax law and how it impacts the various industries with the goal of providing answers to your questions. Individuals will probably spend very little time and those doing their own returns will continue to answer the questions posed by the software though they may not understand whether the answer is yes or no. Practitioners will attend CPE, some more hours than others, and expect to learn what they need to know in 16 hours or less. Even more will never attend CPE because it is not required.
I can tell you that is not enough time. We still have practitioners who have not mastered the Affordable Care Act.
Take the time this year to learn the new law. Go to CPE even if not required, to better serve your clients. Your clients cannot expect to hear the answers from IRS, rather they will depend on you to provide those answers. Take advantage of CPE opportunities that break the new law into bits and pieces so you can better understand and process the concepts. Do not expect to learn it all in a span of 16 hours. After being in the tax field for nearly 36 years, it may take me another 36 to make sure I have a complete handle on the Tax Cuts and Jobs Act of 2017. I may have it mastered by the time a new tax bill hits the President’s desk.
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CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.